Correlation Between KakaoBank Corp and PlayD
Can any of the company-specific risk be diversified away by investing in both KakaoBank Corp and PlayD at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining KakaoBank Corp and PlayD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KakaoBank Corp and PlayD Co, you can compare the effects of market volatilities on KakaoBank Corp and PlayD and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in KakaoBank Corp with a short position of PlayD. Check out your portfolio center. Please also check ongoing floating volatility patterns of KakaoBank Corp and PlayD.
Diversification Opportunities for KakaoBank Corp and PlayD
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KakaoBank and PlayD is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding KakaoBank Corp and PlayD Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlayD and KakaoBank Corp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on KakaoBank Corp are associated (or correlated) with PlayD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlayD has no effect on the direction of KakaoBank Corp i.e., KakaoBank Corp and PlayD go up and down completely randomly.
Pair Corralation between KakaoBank Corp and PlayD
Assuming the 90 days trading horizon KakaoBank Corp is expected to generate 2.76 times less return on investment than PlayD. But when comparing it to its historical volatility, KakaoBank Corp is 1.15 times less risky than PlayD. It trades about 0.05 of its potential returns per unit of risk. PlayD Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 549,000 in PlayD Co on October 16, 2024 and sell it today you would earn a total of 77,000 from holding PlayD Co or generate 14.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KakaoBank Corp vs. PlayD Co
Performance |
| Timeline |
| KakaoBank Corp |
| PlayD |
KakaoBank Corp and PlayD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KakaoBank Corp and PlayD
The main advantage of trading using opposite KakaoBank Corp and PlayD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KakaoBank Corp position performs unexpectedly, PlayD can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in PlayD will offset losses from the drop in PlayD's long position.| KakaoBank Corp vs. Hanjoo Light Metal | KakaoBank Corp vs. PJ Metal Co | KakaoBank Corp vs. DONGKUK TED METAL | KakaoBank Corp vs. Korea Air Svc |
| PlayD vs. Dongbu Insurance Co | PlayD vs. Woori Financial Group | PlayD vs. KakaoBank Corp | PlayD vs. Samsung Life Insurance |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |